40A(3)

Whether Section 40 A(3) in case of sales of flat applicable?

You have not clarified whether you are in to business of buying and selling of flats. However I presume that the flat that you sold is your personal residential property. Hence you have nothing to do with section 40 A (3). Section 40 A(3) speaks regarding expenditure incurred in business.

·         But be sure that you have not violated any provisions that are laid under section 269SS.

·         Think about the capital gains that would have been arisen due to sale of flat.

Regds

Jb

Yes in this in my personal name. and for personal asset

My plea is that since I didnt gain anything on this sale, so I didnt mention it in ITR of 04-05

this flat alloted to me in Feb 2002 by society and I sold it in June 2004,

how can IT deptt crack that I ddint gain anything on it.

because they are saying that it is unbelivlable that I didnt gain any thing,,

since there is no cheque involve. how can they calculate on cash transaction.

you have not violated sec 40A(3) as such. the said section is applicable for business and profession carried on by the assessee. 

you should have shown such cash received in your accounts and mentioned in the ITR accordingly. 

Sec 50C gets attracted if you sold the real estate properties. since the sale consideration shall be the value of the property adopted for stamp duty purpose.

in my opinion, there is no violation of Sec 269SS, sec says, "NO PERSON SHALL TAKE OR ACCEPT FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR DRAFT"

penalties is generally levied if there is case of concealment of income. Mens rea (guilty mind) is to be proved by the dept. if you have not made any profit in accordance with the provisions of income tax Act then no penalty will be charged. further, according to sec 148, a notice for block assessment shall be issued within 4 years or 6 years(if the income is or likely to exceed Rs. 100000) as the case may be.